$450m Tax Increase Passed

Yesterday, following the announcement of a compromise on the budget bills, several of my conservative colleagues in the House of Delegates and I sent a letter to Governor Moore urging him to veto any bill containing increased taxes and fees.

While the mainstream media and many Republicans are happy the conflict is over, Democrats in the House of Delegates have taught the Senate, the Governor, and House Republicans a valuable lesson in confrontational politics.

Understanding confrontational politics as a negotiation tactic is important, as it involves the aggressor advancing their agenda by strategically retreating. Lenin employed this tactic, describing it as a pivotal strategy for the advancement of communism. He used the analogy of comparing the backswing of the hammer to being just as crucial as the forward thrust to drive a nail.

At the start of the legislative session, Governor Moore said he would not raise taxes. His budget, submitted in mid-January, included no new or increased taxes. Two months later, the Senate sent the House of Delegates a balanced budget without tax increases.

The Democrats in the House of Delegates, however, had other plans. Initially, they introduced a deep fake: HB1515, which was an estimated tax increase of $2.8B. HB1515 would have expanded the sales tax to include services. It basically taxed everything that moved; however, that was merely a distraction.

The Appropriations Committee then, instead of sending individual bills containing tax increases to the Senate, strategically amended the Budget Reconciliation and Financing Act (SB362 - BRFA) with $1.3 billion in new tax and fee increases. The BRFA balances the operating budget and must be passed to fulfill the constitutional obligation of a balanced budget. This action forced the Senate to address the issue of tax increases.

On Wednesday, a "compromise" between the House and the Senate was announced, resulting in a significant tax increase amounting to nearly $450 million in additional taxes collected from hard-working Marylanders. The tax increases are centered around an additional $1.25 per pack cigarette tax and numerous vehicle registration and transportation fees, totaling a whopping estimated $357m.

This negotiation tactic was crafty and left both sides feeling like they won. The Senate feels good about eliminating close to a billion dollars in tax increases, and the House Appropriation Committee feels good that it was able to impose its will and advance its agenda without really losing anything. But in reality, the House "ate the Senate's lunch" or rather "gored their ox." Whatever analogy you use, the situation was classic: ask for the moon and then fall back to a more so-called "reasonable" position, but in reality, they gave up nothing.

In the end, the taxpaying people of Maryland lost, now saddled with millions in increased taxes.

We are now urging Governor Moore to honor his goal and commitment of not raising taxes and fees by exercising his veto power.

*Please note: the total increase in taxes approaches $450. When the letter was drafted to the Governor, not all the details were yet released.